GBPJPY Lacks Bullish Signals Despite Rebound

Technical analysis of Forex market

GBPJPY has been in recovery mode this week, partially erasing last week’s losses thanks to the bounce on the long-term dashed ascending trendline, which has been supporting the market since the 2020 freefall.

The 38.2% Fibonacci retracement of the latest down leg at 151.35 currently accompanied by the 20-day simple moving average (SMA) remains the main obstacle to upside movements for another week as the RSI and the MACD continue to fluctuate in the bearish area despite the recent improvement.

However, even if the price runs above 151.35, traders would like to see a sustainable extension above the short-term descending trendline and the 50% Fibonacci of 152.25 to express a bullish view on the pair. If that’s the case, the pair could gear up to the 61.8% Fibonacci of 153.64. Then, a close above the 154.43 – 155.14 restrictive region will be needed to secure access to the 156.06 peak.

On the downside, the 23.6% Fibonacci of 150.24 and the long-term supportive trendline could prevent any declines towards the 200-day SMA and July’s low of 148.45. Breaching the latter, the sell-off could sharpen towards the 147.35 handle.

In brief, GBPJPY is still lacking bullish signals despite this week’s rebound. A bounce above 152.25 is required to raise buying interest, while a step below 148.45 would put the market back on the bearish path.